A third of Ireland's 'top 20' law firms hit by cyber attacks in the past 12 months

A third of the country’s “top 20” law firms — and one in five of all firms — were the victims of cyber attacks on their IT systems in the past 12 months, a national survey of the profession has found.

The threat is one of the factors which has contributed to more than 80% of firms beefing up their information technology systems during 2015, according to the Smith & Williamson’s Survey of Irish Law Firms. Almost two in three firms are planning further IT investment in the next 12 months.

The authors quoted Rory O’Neill, an investigating accountant with the Law Society, as saying: “Solicitors are particularly valuable targets for cyber criminals due to the maintenance of substantial sums of monies in their client accounts.

“The Law Society is aware of a number of attempts to gain fraudulent access to client monies.”

The survey also reported that some solicitors have had funds fraudulently removed — in one case substantial funds.

Paul Wyse, managing director of Smith & Williamson Ireland, said 14% of firms surveyed listed security concerns as the reason for increasing investment in IT.

“Considering a large percentage of attacks go unreported due to their sensitive nature, cyber security has now become a critical key issue for the sector,” he said.

“Firms know the technology and individuals are out there that can potentially compromise their IT systems and are taking steps to minimise their exposure. It is an area few are willing to speak openly about but I think it is an area every firm will have concerns about, especially with technology playing a larger role in the sector.”

Despite the cyber threat, the Smith & Williamson report indicates a relatively positive year for the legal profession.

All of the top 20 firms who responded to the survey have seen an increase in their staff numbers this year as did almost half of all firms surveyed (49%). Most of the top 20 firms (93%) and 57% of all firms surveyed expect staff numbers to increase in 2016. In fact, since 2014, the number of practising solicitors has risen by 329 or 4% to 9,224.

“This is expected to increase by another 300 at least in 2015 according to the Law Society’s most recent annual report,” Smith & Williamson said.

It also pointed out that the Law Society recently reported a female majority (51%) of practising solicitors in Ireland. “This is the first time a female majority has existed in the legal profession according to the Law Society,” it said.

The survey’s authors said the increase in staffing levels had meant competition for talent was becoming more of a challenge and that in turn had led to 29% of all firms (67% of top-20 firms) reporting pay increases of more than in 2015. It did, however, add that many smaller firms are still recovering from the recession and made no pay increases in the last 12 months and more than one in 10 firms had cut staff.

After a slump in construction and property sales during the recession, the survey found that property/conveyancing as well as litigation/dispute resolution, were the principal practice areas driving growth this year.

“The improvement in trading conditions has resulted in many firms enjoying increased revenues and profits again in 2015, with 70% of firms (93% in the top 20) reporting an increase in revenues,” the authors said.

“Profits have increased in 64% (73% of the top 20 firms) of firms surveyed and 46% of firms are reporting a year on year increase in billable hours in this year’s survey (73% of top 20 firms).”

Nonetheless, it said increased competition had resulted in, what it described as a “downward” pressure on fees. The report said that had been mentioned by 47% of the firms surveyed.